UPDATE 1-BP, Conoco agree to swap North Sea, Alaska assets

LONDON, July 3 (Reuters) - BP and ConocoPhillips announced on Tuesday a swap deal that will see the British oil giant increase its stake in a major North Sea development while its U.S. peer will grow in Alaska.

Houston, Texas-based Conoco said it would sell a 16.5 percent stake in the Clair field to BP, which will see its interest grow to 45.1 percent. Conoco will retain a 7.5 percent interest.

Reuters reported in May that Conoco was looking to sell its North Sea fields as part of the company's focus on its shale operations in its home market.

For BP, Clair is a major asset in the North Sea, where BP plans to increase production to 200,000 barrels per day by the end of the decade.

A second phase in the BP-operated field, known as Clair Ridge, is expected to start production later this year, with production capacity of 120,000 barrels of oil equivalent per day.

"Clair is a key advantaged oilfield for our North Sea business, a giant resource whose second phase is about to begin production and which holds great potential for future developments," BP head of upstream Bernard Looney said in a statement.

At the same time, Conoco agreed to buy BP's entire 39.2 percent stake from BP in the Greater Kuparuk oil field in Alaska and a 38 percent interest in the Kuparuk Transportation Co.

The transactions are expected to be cash-neutral for BP and Conoco and are anticipated to close in 2018, BP said in a statement.

"These transactions are significant for ConocoPhillips because they continue our strategy of coring up our legacy asset base in Alaska," Conoco Chief Executive Officer Ryan Lance said in a statement. (Additional reporting by Anirban Paul in Bengaluru; Editing by Maju Samuel)